Environmental Economics: Three Approach To Internalize Externalities

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III. Environmental Economics: A trade-off between economic activities and environmental quality This branch of study believes that a market economy expresses the consumer preferences of natural resources in the best possible way, which in turn determines their economic value. As it has been mentioned before also, human economy is dependent on the ecosystem for raw materials. And these resources limited in nature. Therefore, the most crucial concept of this branch of economics is to comprehend the trade-off between economic activities and the quality of environment. There is also a recognition that such a trade-off cannot be avoided and hence it is best to look for an optimal choice that takes into account all the suitable costs as well as benefits.…show more content…
Liability laws are based on the polluter-pays principle according to which polluters must pay a financial compensation for the damage caused by them. Such laws are effective to an extent since they have a moral appeal in the form of polluter-pays principle. Secondly, Coasian laws are defined on the premises that ownership rights are not defined clearly which causes externalities such as pollution. Therefore, it is considered that legally enforceable ownership rights will help in internalizing externalities. It is pointed out that it is an advantage to use this approach since it minimizes the role of regulators and limits them to function in assigning property rights. Moreover, private settlement of disputes is also encouraged. Thirdly, emission standards is one of the most widely used method for regulation of pollutants. It is based on the concept that polluters should not restricted to certain pre-decided pollution standards, if they do not conform to these standards then they can be either legally prosecuted or liable to pay monetary fines. It is believed that they are easier to introduce also, since they have the backing of the state they are morally appealing. Emission standards aim to achieve pre-established targets and because of this reason they also receive more support from environmental groups (Huussen,…show more content…
The members of this sub-discipline stand united to believe in the importance of environment thereby contributing to the cause of environmentalism. Environmental research has been greatly influenced by some sociological concepts. Sociological theories of interpretation and cultural subjectivities have started to gain primacy over the materialistic explanations and tendencies. However despite the differences between the sociological and materialist explanation they both coincide on the belief that environmental movement is becoming a major movement in advanced society’s vis-à-vis cultural and political institutions (Buttel,

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